Restaurants feeling hard hit in current economy

Jan. 15, 2009 – Andrea
Tahlier, manager of Kroll's South Loop, says the end-of-year holidays are
usually the restaurants busiest time of the year, but lately she's noticed
fewer customers at lunch time.

"People just
don't seem to be going out for lunch anymore," Tahlier said. While the bar at
Kroll's has boosted business. "When times are hard, people tend to be more
drawn to bars," she added.

Kroll's is
not alone in the slow down. Rising food costs and dwindling numbers of
customers are hurting restaurants around Chicago. Restaurant owners say some
consumers are choosing to eat out less while others are opting for cheaper
eateries.

According to
reports from the National Restaurant Association, eating and drinking
establishments have cut nearly 36,000 jobs in the last four months. In addition
to the increase in job losses in the restaurant industry, eateries also have
had to cut back on their employees' hours. The average weekly hours
worked by non-management employees is only 24.1 hours.

Some
restaurants have even closed their doors. Chain restaurants Bennigan's and
Steak & Ale closed many of their locations after their owner, S&A Restaurant Corp., filed for bankruptcy in July. Bakers Square owner
Vicorp Restaurants Inc. filed for Chapter 11 reorganization in April.

In a survey
conducted this year by the National Restaurant Association, 29 percent of
restaurant owners and operators identified the economy as their No. 1
challenge.

Employees in
many areas are feeling the pinch as well.

Aleya James,
who works for Starbucks in South Chicago said, "After the economy started
getting really bad, I noticed a decrease in the amount of hours I was being
given. I work part time and attend school. The 20 hours or so that I was
working, I needed to pay for necessities. It's definitely a financial strain."

Chicago
residents say they are not frequenting restaurants as much because of rising
costs and financial worries.

"I know to
watch how often I eat out," said Mia Madison, 42, from South Chicago. "I work
downtown and I used to be able to buy lunch frequently. I eat out less, and if
I do eat out it is unhealthy because I go to the Dollar Menu at McDonald's. I
try to bring my lunch."

Vernon
McCallum, 20, from South Chicago said, "The economy has definitely slowed down
how often I eat out. Most people are losing their jobs or don't have one.
Nowadays I stay in and cook."

A rise in food
costs is affecting restaurant profit as well. Since January last year, the
average cost for a dozen eggs went up from $1.38 to $2.17. Milk increased from
$2.67 to $3.54 a gallon and a loaf a bread is up to $1.26 from $1.01. The
Consumer Price Index for Chicagoland has increased 4.4 percent, which is the
highest increase since 1996.

South Loop
Dunkin Donuts manager Ladarrius Wallace said his franchise is more affected by
rising food costs than dwindling costumers.

Many
consumers say they are going to less expensive places to dine.

Stephanie
Mueller, 25, of North Chicago, said, "My eating habits have been greatly
affected. I don't go and do nice dinners anymore. I probably eat out not even
three times a week. If the economy were better, I definitely would go to nicer
restaurants as opposed to grabbing a sandwich."

Some
restaurants have been impervious to the economic slowdown.

Lisa Ko,
owner of Tamarind Restaurant in the South Loop, said her business is not being
significantly affected by the nation's economy. Ko attributes Tamarind's
success to ability to draw business To good service, and above all, low prices.
"We have good and affordable food," she said.

Ko also said
the restaurant is close to hotels and colleges, which also helps keep business
steady.